Canada Considers Imposing Taxes on Some Exports to America

Bloomberg reported on Friday that the Canadian government is considering imposing taxes on key commodities it exports to America, including uranium, oil and potash, if US President-elect Donald Trump carries out his threat to impose comprehensive tariffs on Canadian products.

According to officials familiar with the discussions within Canadian Prime Minister Justin Trudeau’s government, the proposed export taxes would be a last resort for Canada, and imposing retaliatory tariffs on US-made goods and export restrictions on some Canadian products would likely be the first option, according to Bloomberg.

Later in the day, Canadian Finance Minister Chrystia Freeland said on Friday that her country would respond strongly if the United States imposed tariffs on Canadian exports.

She added in a press conference, “The Canadian response will certainly be strong. I am confident that it will be effective.”

Canada is the largest foreign supplier of oil to the United States to a large extent, as some refineries rely on cheaper Canadian heavy oil, in light of the lack of available alternatives.

If the taxes were imposed on Canadian oil, they would significantly raise costs for the U.S. Midwest, where fuel manufacturers rely on Canada for nearly half the crude used to make gasoline and diesel, according to Bloomberg.

Canadian uranium is also the largest foreign source of fuel for U.S. nuclear power plants, while potash from Canada’s western provinces is a major source of fertilizer for American farms.

This week, Canadian Prime Minister Justin Trudeau said Monday that Americans are beginning to realize that tariffs on all Canadian products would significantly increase the cost of living, and he said he would retaliate if U.S. President-elect Donald Trump insists on imposing them. Speaking at an event hosted by the Halifax Chamber of Commerce, Trudeau also said dealing with Trump would be “more challenging” this time than last time, because Trump’s team has come with a clearer set of ideas for what they want to do immediately than it did after his first election win in 2016.

The president-elect has threatened to impose a 25 percent tax on all products coming into the United States from Canada and Mexico unless they stop the flow of migrants and drugs.

Earlier this month, Trudeau traveled to Florida on an unannounced visit and had dinner with Trump at his Mar-a-Lago residence, days after the Republican Trump pledged to impose tariffs on Canadian and Mexican imports after he is sworn in as president in January.

Trump said after the meeting that he had a “very productive” meeting with the Canadian prime minister.